Why Some Coffee Shops Get More Expensive While Others Are Stuck Discounting

 In recent years, a strange phenomenon has become more and more obvious:

Two coffee shops on the same street —
one keeps raising prices and customers still happily pay,
while the other has to keep offering discounts, giveaways, and promotions… yet business remains slow.

Most people think the difference lies in “cost” or “how good the coffee tastes.”
But the truth is usually this:

It’s not about the coffee.
It’s about which track you place yourself on.

The coffee business has an extremely low barrier to entry.
And in low-barrier industries, owners often get pushed into two opposite directions:

Either you go up and create value,
or you go down and compete on price.
The middle ground is the hardest place to survive.

01. Coffee Shops That Can Raise Prices Aren’t Selling Coffee — They’re Selling Irreplaceability

If a café can keep raising prices while customers continue to buy, it always shares one trait:

People can’t easily replace it with another shop.

This irreplaceability usually comes from three places:

① The flavor truly has a memorable identity

Not “good,” but “unique — other cafés can’t replicate it.”

For example:

• A latte with a special cream-to-milk ratio

• A signature house blend or seasonal special

• A consistent roasting style the store is known for

After a while, customers aren’t craving coffee —
they’re craving your coffee.

This is rarer than most owners realize.

② The space creates an emotional anchor

Many people visit a café not for the drink,
but for the feeling of “those 20 minutes inside.”

A space is psychological signaling:
comfortable, quiet, a place to linger — this is all part of the premium.

Sometimes, it makes more money than the coffee itself.

③ Your customer base is clear — and gets clearer over time

Cafés that grow upward all have one thing in common:

They know who their customers are,
and even more importantly —
they know who they aren’t serving.

They don’t chase trends or change menus for traffic.

The clearer the identity, the higher the value.

02. Coffee Shops That Can Only Compete on Discounts Fall Into One Trap: They’re Too Easily Replaceable

When customers feel,
“Eh, doesn’t matter if I skip this place,”
your pricing will only go lower and lower.

Why?

Because in their mind, your store becomes “just one of many options.”

The trap of “must discount to survive” usually comes from three common issues:

① Your products are forgettable

Standard flavors, flat profiles, generic “signature” drinks, sweetness relying on cream.

Customers won’t say it’s bad,
but they also won’t remember it.

This is the most dangerous middle zone:
Not wrong — but not valuable.

② Your shop is no different from the five cafés next door

Same décor, same iced latte, same menu structure.

The more customers compare, the more replaceable you become.

Replaceable means your price has no ceiling — only a floor.

③ Your customer base is too scattered

Everyone can come,
but no one has to come.

Your daily traffic becomes a lottery.

Without a core repeat customer group,
your only tool becomes promotions and discounts — a temporary fix that never solves the root problem.

It keeps the shop alive,
but it doesn’t keep it healthy.

03. The Harsh Truth: The Same Coffee Can Have Double the Value Based on Positioning

Maybe you’re selling a latte for 22 RMB,
while another shop charges 32 RMB and still does well.

The difference isn’t necessarily ingredients —
it’s that they make customers feel it’s worth it.

This reflects a simple rule of consumer psychology:

Value isn’t based on cost — it’s based on the cost of switching.
When customers don’t need to think before choosing you,
they willingly pay more.

But if they hesitate over every cup,
your price can only go down.

04. Every Café Must Eventually Answer One Question: Are You a “Destination Shop” or a “Convenience Shop”?

• Destination shop: customers come specifically for you

• Convenience shop: customers buy because they happen to pass by

Destination shops hold long-term value.
Convenience shops can only compete on price.

The most dangerous situation isn’t being a convenience shop —
it’s thinking you’re a destination shop when the market doesn’t see you that way.

05. Summary

Two cafés, two completely different outcomes:
one keeps raising prices, the other keeps discounting.

The difference isn’t ability —
it’s direction.

Go upward on value → prices rise, margins rise
Go downward on price → margins shrink, pressure increases
Stay in the middle → endless struggle

Running a café is never just “making good coffee.”
It’s about putting your business in a position no one else can take from you.